Research - JUNE 19, 2017

Raintree Partners plans $500m in Calif. development projects

by Jody Barhanovich

Raintree Partners, an Orange County–based private commercial real estate investment company, is under construction on three mixed-use projects in California totaling more than $500 million in value.

The projects include a 465-unit apartment and co-working property in Sunnyvale ; a 109-unit multifamily and retail project in Dana Point ; and a 92-unit multifamily, co-working and kayak rental property on the waterfront in San Francisco.

Raintree’s Encasa development will feature 465 luxury apartment units and nearly 5,500 square feet of co-working space that offers private offices, lounges and other features. The project also includes an extension of the John Christian Greenbelt, a pedestrian path and bike network that connects the property to local business hubs. Raintree completed the first phase of the project in fourth quarter 2016 and phase II of the project is in progress.

The second project, called Prado West, will bring 109 new luxury residences and nearly 30,000 square feet of new restaurants, shops, and public courtyard space to Dana Point, Calif. It is the first major development in Dana Point’s revitalization plan for its downtown Lantern District, said Jason Check, managing director for Raintree Partners.

The third project, called The Martin, is located in San Francisco’s Dogpatch neighborhood and includes 92 luxury apartments as well as co-working space and waterfront kayak rentals.

Raintree Partners is a private commercial real estate investment company principally engaged in the acquisition, development and redevelopment of multifamily residential and mixed-use properties in the major markets in California. The firm, in partnership with an institutional equity investor, takes a long-term investment perspective in the execution of its acquisition and development strategy.

Housing demand continues to escalate single-family home prices in the San Francisco Metro Area, directing more residents to rent apartments and spurring development, according to Marcus & Millichap. To meet soaring residential demand, developers have ramped up apartment construction, creating the largest number of annual unit completions in more than two decades.

More than half of the new units are in the SoMa submarket, led by the

third phase of Trinity Place, a 19-story building containing 546 apartments. Deliveries outside the urban core are primarily located in South San Mateo County. Due to elevated supply pressures, rent growth will remain challenged and property specific, particularly in submarkets where delivery volumes are highest.

Robust absorption of the new units will keep the average vacancy rate this year below 4 percent, according to the report.

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